Since World War II the standard reply to anyone proposing to cut a particularly high tax has been “but hardly anybody pays it.” John F. Kennedy looking at the then top rate of 91% was told not to worry about such a high rate because nobody paid it. The people pointing this out were absolutely correct. As Arthur Laffer showed with his “Curve” A graph running from 0 to 100% tax rate will raise no revenue at either extreme. Clearly 0 tax raises 0 revenue but people will do virtually anything rather than just giving all their hard-earned income to the government at 100%. It made sense then at hide it, legally or not, or maybe only work to the level of a reasonable tax rate and no more. At 91% then it made perfect sense to write off all “expenses” you could. Business people found ways to have their companies pay for everything from autos to country club memberships. After all the $1,000 of marginal income at the top rate meant you kept only $90. The investment industry found investments with 90-100% write-offs in the first two years. These were structured so the investment would have a 0 cost basis and when eventually sold would pay only the capital gains tax then at 25%. Limited partnerships for high write-off endeavors such as Oil Drilling, Angus Bull breeding and planting Pecan trees flourished. After all, even if the investment was a loser and returned only $2 out every three invested you still came out. Out of your $1000 invested you only got back $675 on which you paid 25% capital gains tax netting $506.25. A crummy investment to be sure but remember if you paid the tax rather than investing you would’ve retained only $90. Looked at from this prospective the investment returned more than 5 times as much. Even at lesser but still high brackets these kind of numbers led to capital moved diverted into mediocre or worse investments. Is this what any reasonable person want for this $1000? The high tax raised little or no revenue but caused vast sums to be into poured into poor or unproductive investments. JFk and Reagan realized the waste entailed in avoiding confiscatory taxes caused a loss to the economy and worked to lower rates.
Policy
The Target
If the President is to appear anywhere in public we see massive security. Inside everyone attending is checked. Outdoors, rooftops are secured and surroundings are constantly scanned. Helicopters overhead survey the entire area. Sharpshooters are there to respond. These efforts are totally understandable as our presidents have far too often been attacked, some with fatal results. They’re always a target. What has changed is the attending crowds and indeed crowds anywhere are now targets. We have developed elaborate actions to protect our president but crowds as the world is now realizing haven’t been given needed protection. The horror in Las Vegas underlines this simple fact.
Divorced from Reality
The extreme reaction to President Trump’s withdrawal from the Paris Climate Accords brought home just how divorced from reality elites in our country (and indeed worldwide) have become. This was a strange agreement where 197 nations have signified their good intentions. Some state what they might do about global warming sometime in the future while others signed up for some handouts from a “Green Climate Fund”. It contains no enforcement mechanisms and apparently everyone can change anything they stated originally. Even in the happy but unlikely circumstance everyone does exactly what they promised, it would have little measurable effect on future climate. No solutions or even cost benefit analysis were offered.. Just a bunch elites gathering in Paris to make themselves feel good about themselves. Like Christians taking communion, the feel they have kept the faith through symbolism. They’re good Christians and if you didn’t well, see you in hell. Never mind you really haven’t done any actual good. The symbolism is everything. In fact, what are we actually withdrawing from? It’s not a verifiable treaty. If it was it should’ve been submitted for Senate approval. It was this pile of feel good holy grails that would have been resoundingly rejected by that august body. Even the far more serious League of Nations Treaty President Wilson signed failed to be ratified. (It didn’t stop World War II either but we digress). Wilson and Obama could sign anything, but to obligate the nation they needed to convince the Senate and by extension the nation of the worth of their endeavors. Wilson had enough faith to bring the League to the Senate and the country. Obama knew these Paris Accords were so flawed he didn’t even try. Yet elites from both our major parties are rending their garments and crying the world is coming to an end. Why? The Paris Accords only symbolically recognized a problem, while doing little nothing to solve it. It just muddied the waters.
We need to realize we have real problem when we don’t do the real work to solve problems, We make only gestures. We have endeavored to point this out in health care. Instead of finding a reasonable way to give all our people real healthcare, both major parties offer up jumbled messes leaving millions without coverage. More pre-existing conditions created through employment change to be dumped on someone. But just as with “climate change” both sides are ready to go to the barricades over these non-solutions. No wonder people question our leaders. They seem incapable of determining and tackling realities. Fighting over at best half measures inspires confidence in no one.
Have we lost the moment?
Increase the special forces, send 10,000 no make it 50,000 or is it 100,000 troops to rid the world of ISIS or is it ISIL. Carpet bomb ’em till the desert glows. Our leaders seem to begun a bidding contest over who can commit the most our resources to obliterating this Islamist group. Others ask what exactly are our obligations in the Middle East and what action makes any sense. Over a year ago, we noted that our real obligations were limited to supporting our friends, the Israelis and the Kurds, helping minorities such as the Christians and Yazidis threatened with genocide and keeping trade routes open. To accomplish these we proposed a major Airbase or bases in Kurdistan from which could train, arm and protect those we were obligated to help. On the other hand, it isn’t our obligation to take in the refugees that the wider Muslim World has refused to do for decades. Arabs especially should’ve been pressured to take in their own. We have absolutely no obligation to aid the Baghdad government. They kicked us out and laid the groundwork for ISIL with their heavy boot on the Sunni. The same mistreatment of the Kurds makes any rapprochement there a mirage. No explanation of our actions is due Russia or China after their actions in Syria and the South China Sea. Kurdistan is the strategic high ground in the Middle East and is where we need to be.
WHAT’S THE PLAN?
Suddenly we’re inundated with images of pitiful refugees. A human wave has washed up on Europe’s shores and everyone asks how did this happen? What’s the plan? Actually this crisis has been building for quite awhile. The Syrian Civil War started back in 2011 and in the ensuing years over 7.6 million Syrians have been internally displaced and 4 million are now refugees. The turmoil has spilled over into Iraq, while bordering Turkey, Jordan and Lebanon have pretty much reached their humanitarian limits. Israel seeing the trend is building a fence to deter any movement in their direction. This river of refugees is being further fed with new streams from the now failed Libyan State and North Africa. Afghanistan facing western withdrawal is another growing tributary. Europe having difficulty dealing with the immigrants they already have is faced with the real possibility of destabilization.
It didn’t have to be this way. We pointed out in in our “SSSSHHHH” posts going back to November of last year and expanded on in our “But Admiral the Wind has Changed” post, that there were things that should be done and the time was ripe to do them. First, the Arab league as a whole needs to allow open immigration and civil rights to all Arabs. For centuries Arabs considered themselves as one people. They share language, customs, history and to a large part religion. We may never comprehend how Arabs ignore the plight of their fellow Arabs, but maybe nobody pushed them to live up to their humanitarian obligations. Now is the time to do just that. The main players in the Arab World need us more than we need them. Oil now is a limp club. On the other hand Iran looms as a monster threat. Our protection or not is a stick, but Europe could provide the carrot with financial help in settling the refugees. This has to be cheaper and far less disruptive than taking them all into Europe. It’s simply too expensive for these welfare states to take in vast number of refugees. Syrians, Palestinians and Iraqis released from wasted lives in refugee camps could actually invigorate their new host countries to the benefit of all. History surely points in that direction
Second, aid the Kurds in setting up buffer zones around their territory for displaced minorities such as the Christians and Yesidis. Some progress has been made in this endeavor but much more can be accomplished. Every person who finds safety and protection under the Kurdish wing, is one less refugee in a camp in the adjoining nations or ending up in Europe. It is well past the time that we realize the opportunities possible in a closer relationship and quiet alliance with the Kurds.
Talking about France and Britain taking in thousands of refugees when the problem is in the millions,shows the futility of the cries for Europeans and even the U.S. do more. Even those thousands are politically unsustainable and could result in governmental upheavals. The rise of extreme parties in Europe parallels the increase in migrants. Donald Trump’s rise in the polls is hardly a signal that the U.S. can do a lot more. Our position always has been that it is essential to solve a Mideast Problems in the Mideast and Muslim Problems in the Muslim World. Never has this been more true than it is today.
Detour on the Road 